The Centre has received multiple bids from suitors to acquire Ferro Scrap Nigam Ltd (FSNL), taking the process to the next stage of privatisation.
“Multiple Expressions of interest (EOIs) received for strategic disinvestment of Ferro Scrap Nigam Ltd (FSNL) 3 a wholly-owned subsidiary of MSTC Ltd,” Department of Investment and Public Asset Management (Dipam) Secretary Tuhin Kanta Pandey said in a tweet.
The privatisation of the government-owned entity involves the transfer of management control in the public sector undertaking (PSU), which is a 100 per cent subsidiary of state-owned MSTC.
The Centre, along with its intermediaries, would evaluate EoIs, and intimate shortlisted bidders by July 8. Then the shortlisted bidders will be provided with a request for proposal (RFP), including the draft share purchase agreement and access to the data room to review documents of the PSU to conduct due diligence. The shortlisted bidder, approved by the Cabinet Committee on Economic Affairs, will be designated as the successful bidder.
The winning bidder will have to undertake certain obligations relating to certain matters including employee protection, business continuity, asset stripping, and lock-in of the shares, which would be specified at the RFP stage.
The eligibility criterion for bidders included a mandatory net worth of at least Rs 150 crore and a positive profit after tax (PAT) in at least two of the immediately preceding five financial years.
In a first, the centre had also introduced changes in the privatisation process of all public sector undertakings (PSUs) starting with FSNL, and has sought a legal declaration from bidders that they have not been convicted by any court, or indicted or received any adverse order from regulators for a grave offence. This was done after the centre had to halt the privatisation of Central Electronics and Pawan Hans after the winning bidders were found to have adverse court rulings and pending appeals against them.
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